[COMPLIMENTARY] Top 3 Things | ISM/Europe/RutRoh!

It’s early, but 16 of the SPX’s companies have reported and aggregate Earnings Depression of -21% y/y for Q2!

1. ISM – if all you did was look at the ROC (rate of change) of the actual economic data, you’d have zero FOMO and/or forcing of performance chasing. ISM for June #slowed to a NEW #QUAD4 CYCLE LOW of 46 (vs. 46.9 in May) with the super Late Cycle Employment component finally slicing into contraction (below 50) like a hot knife through #Quad4 butter (down 4.4 points to 48.1)
2. EUROPE – both the Industrial Recession data and now Consumption data are #slowing to NEW #QUAD4 CYCLE LOWS – and my #VASP Signal sniffed that out in the last 4-6 weeks with our Top 3 European Shorts (France, Austria, Finland) looking nothing like Jensen’s NVDA tat. Austria (EWO) leading losers this morning at -1.0% and I bought #GrowthSlowing via BNDX in the last week
3. RutRoh! – Russell 2000 (IWM) has a tasty setup here on the short side with -4.8% of immediate-term downside in my Risk Range and a capitulatory (shorts were forced to cover into #MOAM = Mother Of All Markups, into month-end) -4% implied volatility DISCOUNT vs. 30-day realized vol. Yield Curve -106bps inverted and companies do have to report economic reality in July/August

Immediate-term @Hedgeye Risk Ranges: SP500 = 4; UST 10yr Yield = 3.65-3.89%

KM